Tax Breaks for Low-Cost Homes OKd

The Orange County Board of Supervisors voted Tuesday to give significant tax breaks to developers of low-cost rental housing, an incentive that came under scrutiny because of concerns about the county budget.

In an effort to encourage construction of housing for the working poor, Orange County for years has offered to make developers of such projects exempt from property taxes.

But the county didn’t have a formal policy until the board voted 4 to 1 to allow the tax exemptions, which could cost it $20 million over the next 55 years.

Supervisor Chris Norby voted against the plan, saying he thought the county should pursue one-time fees from developers instead of giving them tax breaks.

Residents of low-cost housing will require public services such as education, recreation and police and fire protection that will cost the county money, Norby said.

“An ongoing property tax exemption is a direct hit on the general fund,” Norby said. “Who is going to pay for all the services for the people living in these projects? ... How does the county make up the gap when more and more properties go off the tax rolls?”

Some housing officials said they feared that Norby’s proposed fees would be passed along to the poor.

“We need to do what we can to encourage the development of affordable housing,” said Tom Wilson, chairman of the Board of Supervisors, who voted for the proposal.

The board also voted Tuesday to spend $11.5 million of redevelopment money to buy and remodel a YMCA building and give it to Newport Beach.

The facility had been in unincorporated Santa Ana Heights before Newport Beach annexed the land.

Supervisors Norby and Bill Campbell voted against the proposal, saying Newport Beach is not a blighted area in need of redevelopment funds. Proponents of the idea noted that the area suffers significant noise pollution because it is close to John Wayne Airport.

Norby said Newport Beach is not “recreationally deprived.”

“They got a bay. They got a beach. They got schools,” he said. “I’ve got a library in La Habra that would love $1 of county money, and they can’t get it.”

Campbell said he would have preferred that the county use the redevelopment money to pay down some debt.

“Here is wealthy Newport Beach getting $4 million of land and $7 million of refurbishment for a community center,” Campbell said. Supervisor Jim Silva said he supported the proposal because the YMCA building will be used by residents of several cities.

He noted that the redevelopment money was intended to make life more comfortable for those living near the airport.

“The people in Santa Ana Heights have gone through a lot,” he said.